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Yesterday at Our National Hotel Conference with BET Founder Sheila Johnson

To hear the challenges that Sheila Johnson faced while launching the wildly successful Salamander Hotels & Resorts in 2002, you would never believe how the company has expanded as much as it has. Sheila explained why yesterday at our Fourth Annual Bisnow Lodging Investment and Innovation Series at the Renaissance Washington DC Downtown Hotel. 

Sheila’s perseverance started during her childhood when her father faced discrimination as a neurosurgeon, who couldn’t practice in white hospitals and ended up getting a job at the VA. The family moved every year, giving Sheila a good lesson in networking as a way to make friends, some of whom she still has. She also became a violinist and ended up teaching lessons and leading an orchestra before launching BET in 1979. 

BET co-founder Sheila Johnson at a Bisnow event

After a career in media, Sheila bought 347 acres in Middleburg, VA, to build a luxury resort. Her family faced death threats and hate mail, but it’s now a wildly successful resort whose brand has expanded to Florida. Sheila says part of Salamander’s success has been making the hospitality experience feel personal. The front lobby is more like a living room and she tells guests to be selfish. The experience is also enhanced with a diverse staff of men and women of different ethnicities, as well as high-end spas and activities like cooking classes with well-known DC chefs and winter retreats on healthy living. 

Sheila was just one of several big names that BLIS’ crowd of over 400 heard from throughout the day. Other speakers included Choice Hotels president Steve Joyce and Marriott executive chairman Bill Marriott, who was interviewed by his daughter, Marriott global officer Debbie Marriott Harrison. (Check back tomorrow for coverage.)

Our first panel this morning kicked off with a picture of the US hotel market, which is stronger than ever. Penn State School of Hospitality Management professor John O’Neill says international investors, particularly those from Asia, are putting their money into more US hotels and they’re looking at high barrier-to-entry markets like New York. The industry is on pace to grow 7.4% in hotel values this year, according to the Center for Hospitality Real Estate Strategy at Penn State. 

Savills Studley hospitality group executive managing director Marc Magazine says the hotel business is strong because equity is so strong, something that isn’t going to change in the near or distant future. The market is also being helped by debt being very available and extremely affordable. Marc's prediction is that 2016 is going to be “good” and 2017 will be a “great year.” “The cycle is darn good and darn good for the foreseeable future.”

Interstate Hotels & Resorts CEO Jim Abrahamson says some other signs of a strong hotel market are the fact that three generations of people (Millennials, Boomers and Gen X) are traveling. It’s uninterrupted demand, coupled with a bigger interest in international travel. He predicts that demand will only continue to grow.  

FelCor Lodging Trust capital transactions VP Debbie Feldman says the REIT is tracking debt closely since it’s often the cause of oversupply in the hotel market. The capital markets are still wide open and very inexpensive and debt doesn’t seem to be creating an oversupply. That means companies are making non-economic decisions with equity. She added that private equity firms will be the ones making acquisitions as opposed to pubic companies. 

CBRE senior managing director Mark Woodworth told our crowd the impact Airbnb is having on the industry. In a nutshell, more of the people offering up their properties on Airbnb are making it into a business. Mark’s analysis shows that at least 20% of Airbnb people who rent units in NYC have multiple properties listed. Another trend is that as the number of Airbnb units grows, hotel prices drop. But given that Airbnb doesn’t release a lot of its metrics, Mark says he’s still not able to "comfortably estimate whether the lack of real rate recovery in the hotel industry can be attributed to Airbnb."

Concepts like Airbnb are disrupting the hotel business but giving entrepreneurs and hotel companies some opportunities to innovate, according to our second panel. Marriott VP Matthew Von Ertfelda says the company launched its innovation team a few years ago and has over 300 “proofs of concept” or products that it’s introduced and it has delivered dividends for the company. Social Tables founder Dan Berger says he allows teams of people in his company, an event planning software firm, to work on specific initiatives and measure their success on what they learned and the outcome. Other panelists included HUGE VP Dan Hou, Streetsense director Adam Williamowsky and Georgetown University hospitality management professor and panel moderator Gray Shealy.

According to our afternoon panel on technology and keeping up with guest expectations, technology has been used to improve customer service. OTO Development co-founder Todd Turner says that four of the company’s hotels tested a program that asked guests to provide their cellphone number upon check-in. The guest gets a text message welcome from the person who checked them in. The guest can text them any requests or concerns. It’s had a good response in the hotel reviews, he says. 

Chartres Lodging Group president Maki Bara says social media is also helping hotels respond more immediately to customer complaints. Her company has one social media person who monitors all the sites, but it’s really everybody’s responsibility. “A negative comment can become positive if you respond quickly.” 

Check out today’s issue for lots more BLIS coverage.